In the ever-changing landscape of the UK’s economy, transparency in public sector finance statistics (PSF) is gaining prominence. The latest release, dated August 22, 2023, sheds light on recent and upcoming changes in these statistics, including annual updates, classification announcements, and their impact on government expenditures and debt.
Methodology and Fiscal Exposure
This release emphasizes the necessity of aligning statistics with the dynamic economy. Methodological changes in PSF statistics aim to reflect the government’s true fiscal exposure. Key fiscal aggregates, such as public sector net borrowing (PSNB) and public sector net debt (PSND), are influenced by these changes. For instance, schemes like the Energy Bills Discount Scheme, involving government subsidies to households, led to increases in both PSNB and PSND.
Upcoming Data Updates in September 2023
In September 2023, the UK will undergo regular annual data updates to incorporate the latest available information. Noteworthy changes will arise from areas like Network Rail, public sector funded pensions, student loans, and capital consumption. Of particular significance, public sector funded pensions will have a significant impact on PSF fiscal aggregates.
Transparency is a core principle, as data updates generally occur annually. Efforts are made to package methodological changes to PSF in a consolidated manner, such as the classification of Bulb Energy Limited into PSF in June 2023. This release provides a glimpse into the impending changes to be introduced in September and encourages users to stay informed about developments in the future.
Impact of Public Sector Funded Pensions Update
September 2023 will witness the incorporation of the latest available data into the pensions estimates. Notably, provisional estimates indicate potential impacts on fiscal aggregates. The largest revisions are expected for the financial year ending March 2023, primarily due to enhanced forecasting methods. These changes are anticipated to result in an £11.8 billion increase in public sector net financial liabilities (PSNFL) and a £5.3 billion rise in PSNB for the same period. Additionally, revisions extend to fiscal aggregates from March 2017 to March 2021 due to updated data.
Classification Announcements
In July 2023, several bodies underwent classification changes:
- Classified to Central Government (S.1311) Subsector:
- Consumer Scotland (from April 1, 2022)
- Foreign, Commonwealth and Development Office (from September 2, 2020)
- Oak National Academy (from August 23, 2022)
- Reclassified as Disbanded Public Sector Bodies:
- Department for International Development (from September 2, 2020)
- Foreign and Commonwealth Office (from September 2, 2020)
As the UK’s economy evolves, these updates reflect the commitment to maintaining accurate and transparent public sector finance statistics, ensuring that the nation’s fiscal landscape is accurately represented. The next release is anticipated on September 21, 2023.